Today, the Digest’s round-up on new capacity, R&D, testing,
distribution and new feedstocks for renewable diesel.

In Louisiana, Emerald Biofuels announced that
it will build an 85 million gallon renewable-diesel refineries at
a Dow Chemical (DOW)site in Plaquemine, Louisiana. The company will use
Honeywell’s (HON) UOP/Eni EcoFining process technology for the
production of Honeywell Green Diesel Fuel.

Emerald and Dow are finalizing a site lease and a site services
agreement for Dow to provide a number of services and utilities to
support Emerald’s operation. The site has ship, barge, rail and
truck access, and Emerald will be capable of both receiving and
shipping by all four modes of transportation. The UOP Ecofining
process, developed in conjunction with Italian refiner Eni SpA,
uses catalytic hydroprocessing technology to convert natural oils
and animal fats to Honeywell Green Diesel Fuel.

The product is chemically indistinguishable from traditional
diesel fuel, features a high cetane value, excellent cold-flow
performance and reduced emissions over both biodiesel and
petroleum-based diesel. Green diesel can be run without blending
and offers value as an upgrading stock for petroleum refiners
seeking to enhance their existing diesel fuels while also
expanding their diesel pool.

Emerald has retained Fieldstone Private Capital Group, Inc. to
assist in completing the financing of the Plaquemine refinery and
expects to have the financing closed later this year. Final
engineering and the construction cycle are to begin immediately
upon financial closing.

The Impact

What is it with Louisiana? It seems like at-scale renewable
diesel projects have never found a a better home. There’s the
Dynamic Fuels project – 75 million gallons in Geismar; the 137
million gallon Diamond Green Diesel project under construction in
Norco, as a JV between Valero and Darling, and now this one,
clocking in at 85 million gallons.

If and when all three are completed, that’s 297 million gallons of
capacity in the one state.

Ah, well its that mother of inland transport, the lower
Mississippi, that really is the story here. All three plants find
themselves in the heavy shipping corridor between Baton Rouge and
New Orleans.

One side note. Emerald Biofuels, Diamond Green Diesel, Sapphire
Energy. I think we’re done with the precious stones now, though
ruby’s still out there. Cubic Zirconia is available.

Renewable diesel – 3 reasons it really, really matters.

It’s a drop-in biofuel, requiring no infrastructure change –
and there are generally no limits on its distribution except
those imposed by cost and geography, and the size of the global
diesel pool itself, which could absorb capacity from
hundreds of advanced biofuels projects.

It’s renewable, here now, made at home, and at-scale today. No
need to wait for the promise of algal biofuels, or other hot
technologies still in the process of commercializing at scale.
More than 600 million gallons of capacity already exists –
Dynamic Fuels plant in Louisiana, and three from Neste Oil in
Rotterdam, Singapore and Finland.

In the case of Dynamic Fuels, Diamond Green and Emerald
Biofuels, all three projects can utilize animal waste residues –
a classic case of turning low-value, noxious feedstocks into
high-value molecules.

Around the Horn: Let’s look at the latest from around the world
in renewable diesel.

New Capacity

In Texas, Darling International (DAR)
announced
that Diamond Green Diesel LLC, its previously announced joint
venture project with Valero Energy Corporation, has secured
financing for the planned construction of its renewable diesel
facility in Norco, Louisiana. Financing will be provided
internally by a subsidiary of Valero Energy Corporation.

According to the project’s sponsors, the facility will be capable
of producing over 9,300 barrels per day or 137 million gallons per
year of renewable diesel on a site adjacent to Valero’s St.
Charles refinery near Norco, Louisiana. The facility will
convert grease, primarily animal fats and used cooking oil
supplied by Darling, and potentially other feedstocks that become
economically and commercially viable, into renewable diesel.
Completion of the facility is anticipated just as 2013 gets
underway.

KiOR (KIOR)
began
construction of its first commercial scale facility, located
in Columbus, Mississippi, in the first quarter of 2011. The
approximately $190 million facility is expected to create several
hundred direct, indirect, and induced jobs during operation, and
over 500 jobs on site during peak construction. Production is
scheduled to commence in the second half of 2012. KiOR’s process
produces refinery intermediates for the production of renewable
diesel.

In New Mexico, Joule Unlimited announced
last November it is ready to start construction on a biofuels
demonstration plant in New Mexico. Joule Unlimited Inc. plans to
convert sunlight and carbon dioxide waste into biofuel at the
planned facility in Hobbs, which is expected to begin operations
in 2012. New Mexico state officials say Joule has the potential to
expand its operations to create 500 new jobs in Hobbs by producing
up to 75 million gallons of renewable diesel and 125 million
gallons of ethanol per year.

Last September in the Netherlands, Neste Oil (NEF.F)
inaugurated
Europe’s largest renewable diesel facility in Rotterdam with
an annual production capacity of 800,000 metric tons that was
built at a cost of $913 million. The facility uses the company’s
NExBTL technology that allows it to use a wide variety of oils,
greases and fats as feedstock.

Key distribution deals

In Finland, Neste Oil (NEF.F)
reports
that they sold their first batch of NExBTL renewable diesel to
the US market.
“We are very pleased to see that legislation on renewable fuels
and our ability to meet the import regulations for these types of
fuels are progressing in various markets,” said Matti Lehmus,
Neste Oil’s Executive Vice President. The release did not
specify who they sold to, or any financial details such as volume
or the amount of sales. The fuel was produced at the
company’s Porvoo refinery in Finland from waste fats.

In Virginia, Dynamic Fuels and Mansfield Oil Company have signed
an agreement to supply renewable diesel to Norfolk Southern
Corporation, one of the nation’s largest transporters of coal and
industrial products. Norfolk Southern has primarily been using a
100% pure Dynamic Fuels renewable diesel at its Meridian,
Mississippi rail yard since early January.

R&D

In Washington, the DOE is making
up to $15 million available to demonstrate biomass-based oil
supplements that can be blended with petroleum. These
“bio-oil” precursors for renewable transportation fuels could be
integrated into the oil refining processes that make conventional
gasoline, diesel and jet fuels without requiring modifications to
existing fuel distribution networks or engines.

In February, Royal Dutch Shell announced
that it has built a next generation biofuels pilot plant at
Shell’s Westhollow Technology Center in Houston, USA, to produce
drop-in biofuels rather than ethanol. It uses a thermo-catalytic
process technology licensed from its commercial partner Virent,
which is similar to the process being used at the Virent pilot
plant in Madison, Wisconsin, USA. The Westhollow plant will
explore the use of a range of feedstocks, starting with sugars and
with the completion of an expansion currently under way, non-food
cellulosic alternatives, leading to the production of a range of
products, including gasoline, diesel and jet fuel.

Market expectations

Among fuels, 50 percent of executives said they expect
cellulosic ethanol to reach 1 billion gallons by 2020, down
from 67 percent in the last survey. Other fuels that were expected
to break the billion gallon barrier by 2020: renewable diesel
(down sharply from 67 to 51 percent), and aviation biofuels at 48
percent.. Algal fuel was flat at 28 percent, compared to 29
percent in the previous poll.Vehicle and ship testing

In California, Volkswagen of America announced
partnerships with Solazyme (SZYM)
and Amyris (AMRS)
to evaluate emissions reductions and demonstrate the performance
of TDI Clean Diesel technology when powered by advanced biodiesel
and renewable diesel fuel.

Under the respective agreements, Volkswagen will provide both
companies with two products each—the new 2012 Passat TDI and 2012
Jetta TDI—in order to closely examine the effects that the fuels
produced by Amyris and Solazyme will have on Volkswagen clean
diesel technology and the environment.

The 12-month evaluation period will equip Volkswagen engineers
with valuable data that will aid in the ongoing enhancement of TDI
Clean Diesel technology and help the brand to develop more
efficient, cleaner burning diesel powertrains for future products.

In California, Solayzme (SZYM)
says the USS Ford, a U.S. Navy Frigate fleet ship, successfully journeyed
from its home port in Everett, WA to San Diego, CA using
Soladiesel HRD-76, Solazyme’s 100% algal derived renewable marine
diesel fuel. The voyage was fueled using 25,000 gallons of a 50/50
blend using Soladiesel and petroleum F-76 in the ship’s LM 2500
diesel turbines, and marks the first demonstration of the
alternative fuel blend in an operational fleet ship.

Feedstocks

In California, Ceres (CERE)
reports their sorghum hybrids were successfully processed into
renewable diesel by Amyris (AMRS),
under a U.S. DOE grant. The pilot-scale project evaluated both
sugars and biomass from Ceres’ sweet sorghum hybrids grown in
Alabama, Florida, Hawaii, Louisiana and Tennessee.